Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s effective tax rate is expressed as income tax benefit as a percentage of loss before income taxes.

In the three months ended September 30, 2019, the Company recorded income tax benefit of $1,079 on a loss before income taxes of $13,275, for an effective tax rate of 8.1%. In the three months ended September 30, 2018, the Company recorded income tax benefit of $2,068 on a loss before income taxes of $8,723, for an effective tax rate of 23.7%.

In the nine months ended September 30, 2019, the Company recorded income tax benefit of $1,479 on a loss before income taxes of $29,982, for an effective tax rate of 4.9%. In the nine months ended September 30, 2018, the Company recorded income tax benefit of $4,026 on a loss before income taxes of $24,335, for an effective tax rate of 16.5%.

The most significant factors impacting the effective tax rate in the three and nine months ended September 30, 2019 were (i) the recording of the period expense associated with the quasi territorial tax regime called the Global Intangible Low Taxed Income Inclusion (“GILTI”), (ii) the foreign rate differential, and (iii) changes in valuation allowances in the United States and Canada.

Effective January 1, 2018, the Company's U.S. federal corporate income tax rate is 21%.

On December 22, 2017, the U.S. enacted significant changes to the U.S. tax law following the passage and signing of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (also known as “The Tax Cuts and Jobs Act”). U.S. federal corporate income tax law changes as a result of the Tax Act continue to impact the Company, most significantly, (i) interest deductibility limits imposed by section 163(j), (ii) GILTI and (iii) the immediate deductibility of certain qualified assets acquired and placed in service. The Company continues to monitor proposed regulations and clarifying guidance from U.S. Treasury as a result of the Tax Act and incorporates relevant items to the computation of the tax provision.